Daily Update 24/11/2021

Main Headlines:

In a move to drive down petrol prices that have become a big contributor towards inflation, President Biden has announced the US will release oil from its strategic stockpile. Yesterday Biden announced the release of 50m barrels of oil, which equates to 2.5 days’ worth of US oil consumption, in the coming weeks. Analysts debated whether the decision was made to show the White House are attempting to stop inflation and questioned whether the release is enough to cover the surging demand. Despite the President predicting that the added supply would lead to lower prices, the wholesale crude prices on financial markets rose after yesterday’s announcement.

Yesterday it was revealed David Cameron lobbied a Conservative donor he ennobled while Prime Minister. In January, the former prime minister successfully lobbied Lord Lupton, a director of Lloyds Banking Group, who has donated more than £3m to the Conservative Party, to persuade the bank to continue doing business with Greensill Capital. The company whom he was an adviser for until its collapse in March 2021, had a scheme for NHS pharmacies where the bank provided money to pay pharmacies for fulfilling prescriptions. Cameron’s intervention with Lord Lupton meant Lloyds maintained a role in the scheme. While Cameron is claiming the scheme saved the Government £100mn a year, this has been disputed by the UK’s public spending watchdog.

Markets

GBP

Sterling is well bid against most major currencies in early morning trade. Governor of the Bank of England (BoE), Andrew Bailey, has suggested he would prefer ‘regulated’ central bank digital currency whilst speaking to the Lords’ Economic Affairs Committee yesterday. He addressed there would be issues around privacy and managing personal data in the while establishing the digital central bank currency, but the sharp rise of bitcoin and other crypto currencies needed greater regulation. The UK has entered a third phase of excess deaths during the pandemic, as more people died during the week ending November 12th and the figure is not explained by Coronavirus alone. These excess deaths suggest that more people have been losing their lives because of strain on the NHS, although this reasoning is contested.

EUR

The euro is weaker against most major currencies overnight. EU-U.K. talks on Northern Ireland trade rules will “probably” continue into next year, according to the European Commission’s Maroš Šefčovič. He stated the EU had been “probably too ambitious” when previously stating that discussions on customs and food checks or the role of the Court of Justice of the European Union could be wrapped up before Christmas. Despite surging inflation, business activity in the eurozone has picked up this month. The eurozone IHS Markit flash composite purchasing managers’ survey, which takes into the monthly pulse of business activity, showed costs and average selling prices for goods and services rising at the fastest pace in the survey’s history. European Commission President Ursula von der Leyen on Tuesday said the fourth wave of COVID-19 slamming Europe was “a pandemic of the unvaccinated” and urged people to get inoculated or a booster shot.

USD

The dollar is weaker against sterling and higher against the euro this morning. In a mandate set to begin January 4th, the Justice Department filed a court motion with the Sixth US Circuit Court of Appeals in Cincinnati, which will require large private employers to ensure their workers are tested weekly or vaccinated against Covid-19. Last week the Court was chosen to decide legal challenges surrounding the vaccine. Elsewhere, a federal Jury has found white supremacist leaders liable from a 2017 rally in Charlottseville. In a decision which will award victims of the violence more than $25 million, the jury found the leaders liable for injuries suffered during a Unite the Right event and a torchlight march. The case was brought on by a number of individuals who were injured that weekend.

Ballinger & Co. Morning Report–24th November 2021

Today’s Rates

GBP>EUR – 1.1905

GBP>USD – 1.3363

EUR>USD – 1.1224

GBP>CAD – 1.6939

GBP>AUD – 1.8511

GBP>SEK – 12.108

GBP>AED – 4.9077

GBP>HKD – 10.415

GBP>ZAR – 21.228

GBP>CHF – 1.2495

  Today’s Calendar      

·       USD    Durable Goods Orders(Oct)

·       USD    Nondefense Capital Goods Orders ex Aircraft(Oct)

·       USD    Gross Domestic Product Annualized(Q3)

·       USD    FOMC Minutes

  Today’s Highlights

·       Forex Today: US data dump, FOMC Minutes to rock markets ahead of Thanksgiving break

·       EUR/USD Forecast: Euro to stay directionless ahead of US data

·       China’s Foreign Ministry: Will release oil reserves according to its needs

·       GBP/USD stays depressed below 1.3400 amid Brexit woes

  (https://frank-exchange.com/)

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